President Barack Obama has promoted a balanced approach to America’s financial situation for his entire presidency. His solution calls for deficit and debt reduction through both spending cuts and increased revenue, and he has a no-nonsense attitude about how concessions will be necessary to progress.
In the middle of November, the President held his first news conference since the election and he was quickly asked about the fiscal cliff. Amid some standard political positioning, Obama said, “I believe this is solvable. I think that fair minded people can come to an agreement that does not cause the economy to go back into recession.”
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But the weeks that followed were packed with a whole lot of nothing getting done. Ideological jousting, practiced on both sides of the aisle, prevented progress: the GOP built strong political armor around the idea of no new tax increases, while Obama was elected on the back of his commitment to end tax cuts for the wealthy, and Democrats failed to propose substantial spending cuts.
Observers and market participants buckled their seat belts as Federal Reserve Chairman Ben Bernanke slammed on the economic accelerator with QE3 and a massive bond-buyback program to replace Operation Twist. The engine’s certainly revved up, but many are unsure whether the whole vehicle is actually moving any faster.
And now, with only a handful of days left before the fiscal cliff trigger that has become synonymous with a new recession, it looks like sobriety may have found its way back into Washington…